Wall Street’s grid agreement: solar and batteries are coming

In 2014, a chorus of analyses from major financial institutions – including Bank of America, Barclays, Citigroup, Fitch Ratings, Goldman Sachs, Morgan Stanley, and UBS – found that solar-plus-battery systems pose a real and present threat to traditional utility business models. Many of them directly cited RMI’s report The Economics of Grid Defection, which assessed when and where distributed solar-plus-battery systems could reach economic parity with the electric grid, creating the possibility for defection of utility customers. Their perspectives varied, but all echoed the common theme of increasing challenges for the current utility business model.

However our recently released report, The Economics of Load Defection, shows a much more likely scenario – one that is coming sooner for more customers in more places, with arguably far greater implications than grid defection – the migration of load from central systems to distributed ones, what we call load defection. The customers don’t leave, but their load does, “defecting” from grid supply to behind-the-meter, grid-connected solar PV and batteries. They thus risk becoming phantom customers.